All Forum Posts by: Joseph Micheal

If I use this is an owner occupied duplex I should be able to use an FHA loan and put 5% down though.

Hi,

I am curious about acquiring our next property in the portfolio.  To date, my wife and I currently hold 4 duplexes (2 in her name and 2 in mine). 

With number 5 on the horizon, is there any recourse to be aware when contacting banks/brokers?  My concern is that a bank will see the other 2 properties during the financial review and insist on having those mortgages converted to products under their own roof (at current interest rates).  Im looking to put down 5% as I would like to keep cash on hand for upcoming deals.  Current equity in the other properties ranges from 15-23%).  Current debt-to-income ratio is not an issue.  All property rents carry their own mortgages with some cushion.

Is this fear rationale?

Deal went contingent so things are on hold for now (until hopefully the deal falls through)!

I spoke with the lawyer and they see a very good case to be able obtain legal zoning!  (Still leaves the financing aspect unanswered)

Thanks all for your input!  Will keep you posted on how things progress!

Quote from @Zane Cress:

If it isn't fully occupied it might be easiest to take down a wall, do the deal, and then put it back up later.

Great Idea! Worth considering in the future!

Quote from @Eric Greenberg:

If I were you Id head to Philly 

Agreed 100%!  Take a drive! See if you like the neighborhood.  Check out the block at 10PM. 
Coming from Princeton, this is a very easy thing to do.  In Philly, a neighborhood can quickly change block to block!

@Alan Asriants Thanks! Ive done some additional research.  It does look like there was some prior history of property use as MFH.  Will chat with the zoning lawyer to get a better feel of things before moving forward with the deal!

Thanks all!

Quote from @Eric Greenberg:

 Agreed!

I appreciate your insight and offer to talk! Ill do some more digging first and circle back!

@Eric Greenberg Thanks for your response.  Was financing an issue with your "slam dunk" property?  Curious to hear more!

Quote from @Mark Munson:

Hi @Joseph Micheal

      Many hard money lenders will have an issue with this. In the event you default, it makes it very difficult for them to liquidate the property to the largest amount of buyers, as most buyers wouldn't be able to get a loan for it. If I were you, I'd also get with the city/county to see what re-zoning looks like, as you could be on the hook if you buy it and then the municipality says you can't operate it as it sits. 

 Maybe just offer more cash down to keep the lender more protected?

Quote from @Nicole Heasley Beitenman:

Have you looked into the rezoning process yet? I'd gather that information before weighing financing options.

 Started that process.  1st lawyer believes it shouldn't be an issue - simple appeal.  I find this hard to believe since nothing in Philly is simple.

I am speaking with a 2nd lawyer tomorrow to get a second opinion.